The test aims to prevent parties from sidestepping withholding taxes as a result of double-tax treaties in force between their countries.

Often, those attempting to avoid any withholding tax use what is known as a 'conduit arrangement' or 'treaty shopping', where the payment is made through an intermediary entity in a jurisdiction with more favourable tax conditions.

Instead, the test defines the beneficial owner as an entity which has "the right to use and enjoy" the payments and "pay it on".

In recent years, there has been uncertainty over whether the recipient who the benefits from these payments should receive a reduced withholding tax rate, which would be otherwise available under a tax treaty between the countries of the payer and recipient.

How far tax authorities can use the beneficial ownership test as an anti-avoidance tool to target the routing of payments through particular countries has also not been clear.

However, PwC tax partner Richard Collier-Keywood is not convinced the revisions achieve any clarification.

He said: "The OECD has provided some clarification on how payments being passed on affect beneficial ownership of income received, but not enough. For instance the new wording refers to 'unrelated payments' without any explanation of what it means for a payment to be related or unrelated.

"Beneficial ownership is a big issue for many international businesses which must comply with complex international and domestic tax rules. Given the current focus on corporate tax affairs, it is more important than ever that the rules affecting the level of tax paid are clear."

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